Dobbs after one year: Confusion, risk & innovation for employer-based health plans

A little more than one year ago, the Dobbs v. Jackson Women’s Health Organization overturned 49 years of constitutional protection for women in the area of reproductive health care. The decision to end a federal right to abortion and allow states to make their own laws in the area sent shockwaves not only through the political world but in the business world as well.

The Dobbs decision left employers in a difficult position: many if not most of their employees — if public polling is correct — support reproductive rights and expect employer-based health plans to cover abortion health services. As subsequent political fallout has shown, even in conservative “red” states, there is strong public support for access to abortion.

At a time when employee benefits, including health care, are a top priority for employees and employers alike, restricting health care in any area is problematic for employers. In addition to affecting companies in states that restrict abortion, large companies with operations in different states are also affected. As of one year since the passage of Dobbs, 20 states have moved to ban or restrict abortion.

ERISA protections — a complicated area of law

Following Dobbs, a number of employers enacted policies to reimburse travel and lodging expenses for employees who travel to another state for abortion services. Many of these companies consider themselves protected against state restrictions by the Employee Retirement Income Security Act of 1974 (ERISA). According to TAFT, the ERISA statute generally supersedes state laws related to employee benefit plans. However, the article notes that law in this area is complicated and may allow more flexibility to self-insured plans than it does to fully-insured plans.

The ERISA laws also generally apply to civil, not criminal, laws. Overall, the legal protections provided by ERISA are uncertain and may be tested in the courts. “Benefits administration in a post-Dobbs landscape is not simple, and employers involved in this area should be aware that they are wading into an unsettled, highly politicized issue,” an article on ERISA law on the Gibson Dunn webpage noted. “When considering whether to provide abortion-related benefits to employees, employers may want to consider what degree of protection, if any, ERISA preemption may offer their employee benefits plans from state legislation and regulation.”

At the same time, political trends may be working in the favor of companies that have provided benefits around travel and other expenses for employees seeking abortion services. An article on the JDSupra website noted that after one year, no employer has yet faced a lawsuit for providing abortion access. The article added that political considerations may be a factor: as noted before, even in red states, many voters favor at least some protections for abortion access.

Chaos around medication abortions

There has been a renewed focus on coverage for abortion medication since Dobbs was passed, but again, politics and legal maneuvering have muddied the waters. In a controversial decision, a U.S. District Court judge in Texas overturned the U.S. Food and Drug Administration’s approval of mifepristone after 20 years of the drug being used widely and safely.

That case is likely to end up in the Supreme Court; in the meantime, several states have taken action to restrict access to abortion medication. Wyoming became the first state to ban any drug, including mifepristone, for abortions. Other states restrict access to the drug, and five states are considering laws prohibiting the use, manufacture, and prescription of abortifacient drugs, including mifepristone and misoprostol.

An article in Bloomberg Law noted that because of the court cases, many employers have paused their efforts to make abortion pills easier to access under their sponsored health plans. Some employers were expanding benefits to include telemedicine access or expanding mail-order access. While some legal experts said abortion medications would remain on the market, others said there could be legal issues that might affect employer plan coverage.

Businesses respond by expanding coverage

Although the risk to companies is real, several have signaled that they will move to respond to employee demand for more coverage. In 2022, Walmart expanded its coverage of abortion services. Dick’s Sporting Goods announced benefits that would cover travel expenses for employees seeking an abortion.

According to Inc., this is part of a larger trend: “Large companies including Starbucks, Tesla, Yelp, Airbnb, Microsoft, Netflix, Patagonia, DoorDash, JPMorgan Chase, Levi Strauss, PayPal, Amazon, and Reddit have all announced plans in the past year to help cover some of the costs related to abortion, including travel, relocation, and legal fees.”

And it’s not just large companies who are innovating in this area. Forbes noted that health startups like Julie and Stix are working on new models for distributing abortion pills and educating people about emergency contraception options. Travel companies like Elevated Access offer private flights for those seeking abortion or gender-affirming care.

Related: Buckle up: 2023 health care survey

The Forbes article noted that in a recent poll of women entrepreneurs, 92% responded that the freedom to decide if and when to have children is extremely important. “Across the political spectrum, 72% of women business owners support a federal law that protects abortion care access. 55% of Republican women support this as well,” the article said.